A worked example
Sarah owns an investment property in Melbourne with an unimproved land value of $850,000. She also owns her primary residence, which is exempt from land tax. In Victoria for the 2025-26 financial year, land tax applies to investment and commercial properties with a total taxable value above $50,000.
The Victorian land tax rate structure works like this: $275 plus 0.2% of the amount between $50,000 and $100,000, then 0.5% between $100,000 and $300,000, then 0.8% between $300,000 and $600,000, then 1.3% between $600,000 and $1 million. For Sarah's $850,000 investment property, the calculation is: $275 + $100 (0.2% of $50,000) + $1,000 (0.5% of $200,000) + $2,400 (0.8% of $300,000) + $3,250 (1.3% of $250,000) = $7,025.
Sarah's annual land tax bill is $7,025. If she'd owned multiple investment properties, the unimproved values would be aggregated before calculating the tax. She'll receive her assessment notice from the State Revenue Office around late January each year.
State-by-state differences
- New South Wales: Land tax threshold is $1,075,000 for 2025-26 (premium rate starts at $6,571,000). General rate is $100 plus 1.6% above threshold. Trusts have a lower threshold of $25,000 and different rates apply.
- Victoria: Threshold is $50,000 for general land, $25,000 for trusts. Progressive rates from 0.2% to 2.25% depending on total land value. Absentee owner surcharge of 4% applies to foreign owners and certain trusts.
- Queensland: Threshold is $600,000 for individuals, $350,000 for companies and trusts. Absentee owner surcharge of 2% applies. Rates start at $500 plus 1 cent per dollar above threshold.
- Western Australia: Threshold is $300,000. Scaled rates from 0.09% to maximum 2.67%. Trust rates are higher.
- South Australia: Fixed rate of $0.50 per $100 above $450,000 threshold for non-primary production land.
- Tasmania: Progressive rates from 0.55% on first $25,000 to 1.5% above $350,000. No threshold, but low values pay minimal tax.
- ACT: ACT uses a different system (fixed charge plus average unimproved value rate) rather than traditional land tax.
- Northern Territory: No land tax in the NT.
Common mistakes people make
- Assuming primary residence exemption applies to the whole property: If you run a business from home or rent out part of your primary residence, that portion may be subject to land tax. The exemption only covers the part you actually live in as your principal place of residence. Keep clear records if you have mixed use.
- Forgetting to aggregate land holdings: Land tax is calculated on the total unimproved value of all your taxable land in a state, not property by property. If you own three investment properties worth $400,000 each in NSW, you're taxed on $1.2 million total, not three separate $400,000 parcels. This pushes you into higher rate brackets.
- Confusing land value with property value: Land tax applies only to the unimproved land value, not the total property value including buildings. Your council rates notice shows site value or unimproved capital value. The house, renovations, and landscaping don't count. A $1 million property might have a $600,000 land value depending on location.
- Not declaring trust ownership correctly: Trusts face lower thresholds and often higher rates. Some people assume family trusts get the same treatment as individuals. In Victoria, the trust threshold is $25,000 versus $50,000 for individuals. Always disclose trust ownership to avoid penalties.
What this calculator doesn't account for
This calculator provides estimates based on unimproved land value and state of ownership. It does not account for absentee owner surcharges (applied to foreign owners in several states), trust-specific rates and thresholds, or primary production land concessions available to farmers in some states. It assumes you're an Australian resident individual with standard investment property holdings.
The calculator doesn't include land tax surcharges that apply in certain council areas, special land tax that can apply to high-value holdings in some states, or any land tax relief schemes you might qualify for (such as pensioner or charitable exemptions). Rate changes announced in state budgets may not be reflected immediately. Always verify with your state revenue office before making financial decisions.
Edge cases and nuances
- Properties straddling financial year ownership changes: If you buy or sell investment property mid-year, land tax liability is typically apportioned based on ownership at midnight on 31 December (the assessment date in most states). Victoria uses 31 December, NSW uses 31 December, but Queensland uses 30 June. Selling on 1 January in Victoria means you're still liable for the full year's tax.
- Deceased estates: When someone dies, their land holdings may remain in the estate for months or years. Most states provide a three-year exemption from land tax for deceased estates, but this doesn't apply if the property was already investment land generating income. The exemption typically only covers what was the deceased's primary residence.
- Company structures owning residential land: Companies generally can't claim the higher threshold available to individuals. In Queensland, companies and trusts face a $350,000 threshold versus $600,000 for individuals. Using a company structure to own residential investment property often results in higher land tax.
- Land used for primary production: Farmland may qualify for exemptions or reduced rates, but the definition varies by state. In NSW, land must be a principal place of residence and genuinely used for primary production. Hobby farms rarely qualify. SA offers partial exemptions for land over 0.8 hectares used for primary production.
